CHARLOTTE, N.C. -- Whether you win the Mega Millions lottery Tuesday night or not, you can still do the right thing and participate in some holiday giving to your fellow humans and get a tax deduction to do it.
But as a budding philanthropist, how do you know your money is going to the right place?
One great place to start your own research is the IRS Form 990 – a tax form filed by most non-profits and available online for free through Guidestar.org or the organization itself.
The United Way of the Central Carolinas released its own IRS Form 990 Tuesday for the fiscal year ending June 30, 2013. Anne McGeorge, a partner at Grant Thornton specializing in non-profits who volunteers her time and accounting expertise to the United Way, went over the lengthy form line by line.
Some highlights of what she looks for in researching non-profits:
• First page of the 990 now tells you the number of paid employees AND volunteers – now 6629 at the United Way.
• Second page breaks down expenses by areas of focus and gives you a good idea of the non-profit’s mission
• Page 7 (part VII) breaks down the board members who run the organization and which, if any, get a paycheck from the organization.
• United Way of the Central Carolinas has not raised its President’s pay in 4+ years, but totals some retirement contributions with the salary for a total of $164,953 last year.
• Part IX totals expenses on by program service, management and general, and fundraising.
• If you add management and fundraising expenses, you’ll get the total overhead of the organization.
• Divide the total overhead by the total expenses and multiply times 100, and you’ll get the percentage of expenses spent on overhead
• That overhead percentage should not exceed 20 to 25 percent for a well run non-profit, according to United Way managers.
• United Way of Central Carolinas spent about 14 percent on overhead last year.
“You don’t want to give money to an organization where a large percentage of your contributions are going to the overhead of the organization,” said McGeorge. “You want it going to the mission of the organization – in the (form) 990 they call it ‘program services.’”
You’ve got two weeks to send in your donation to get a tax deduction on this year’s form 1040. If you hit the Mega Millions, this will be more complicated, but probably worth it.